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Soy, corn, wheat inch higher ahead of U.S. holiday weekend

Chicago Board of Trade corn, soybean and wheat futures closed modestly higher on Friday as traders squared positions ahead of a three-day U.S. weekend and weighed contrasting crop prospects in South America, analysts said.

Uncertainty about the future of a Black Sea grain export corridor underpinned values, while a firming dollar and declines in crude oil prices capped rallies.

CBOT March soybeans SH3 settled up 3/4 cent at $15.27-1/4 per bushel and March corn CH3 ended up 1-3/4 cents at $6.77-3/4 a bushel. CBOT March wheat WH3 settled up 1/2 cent at $7.65-1/2 a bushel.

“It creates a conversation: Is the Brazilian bean crop big enough to offset the losses in Argentina?” said Tom Fritz, a partner with EFG Group in Chicago.

Early strength in the dollar index .DXY hung over the grain markets, making U.S. grains less attractive globally, although the dollar later turned lower. The greenback drew support this week as investors upped their expectations for U.S. interest rates.

Similarly, crude oil futures CLc1fell on worries that interest rate hikes could weigh on demand. Corn and soybeans sometimes follow trends in crude oil futures given their respective roles as feedstocks for ethanol and biodiesel fuel.

Meanwhile, an escalation in fighting in eastern Ukraine and renewed Russian criticism of a wartime shipping corridor from Ukraine underpinned the wheat market. Negotiations will start in a week on extending the corridor agreement, a senior Ukrainian official said on Friday.

“You’ve got Black Sea anxiety. The anniversary of the Russian invasion is next Friday,” Fritz noted, adding that K.C. hard red winter wheat futures drew additional support from dry conditions in portions of the U.S. Plains winter wheat belt.

“If anybody wants to be long wheat, they want to be long K.C.,” Fritz said.

Traders await the U.S. Department of Agriculture’s annual Outlook Forum next week in which the government is expected to release preliminary forecasts for 2023 plantings and production of major U.S. crops.

U.S. markets and most government offices will be closed on Monday in observance of the Presidents Day holiday.
Source: Reuters (Reporting by Julie Ingwersen; additional reporting by Gus Trompiz in Paris and Naveen Thukral in Singapore; Editing by Rashmi Aich, Chizu Nomiyama, Leslie Adler and David Gregorio)

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